DevOps is fundamentally about collaboration and agility. Unfortunately, when we add security and compliance to the picture, the message gets distorted.

The term “DevSecOps” has come into fashion the past few years with the intention of seamlessly integrating security and compliance into the DevOps framework. However, the reality is far from the ideal: Security tools have been bolted onto the existing DevOps process along with new layers of automation, and everyone’s calling it “DevSecOps.” This is a misguided approach that fails to embrace the principles of collaboration and agility.

Integrating security into DevOps to deliver DevSecOps demands changed mindsets, processes and technologies. Security and risk management leaders must adhere to the collaborative, agile nature of DevOps for security testing to be seamless in development, making the “Sec” in DevSecOps transparent. — Neil MacDonald, Gartner

In an ideal world, all developers would be trained and experienced in secure coding practices from front end to back end and be skilled in preventing everything from SQL injection to authorization framework exploits. Developers would also have all the information they need to make security-related decisions early in the design phase.

Once again, the reality falls short of the ideal. While CI/CD automation has given developers ownership over the deployment of their code, those developers are still hampered by a lack of visibility into relevant information that would help them make better decisions before even sitting down to write code.

The entire concept of discovering and remediating vulnerabilities earlier in the development process is already, in some ways, out of date. A better approach is to provide developers with the information and training they need to prevent potential risks from becoming vulnerabilities in the first place.

Consider a developer that is assigned to add PII fields to an internet-facing API. The authorization controls in the cloud API gateway are critical to the security of the new feature. “Shifting left and extending right” doesn’t mean that a scanning tool or security architect should detect a security risk earlier in the process — it means that a developer should have all the context to prevent the vulnerability before it even happens. Continuous feedback is key to up-leveling the security knowledge of developers by orders of magnitude.

La Haus, which has developed an online real estate marketplace operating in Mexico and Colombia, has secured $100 million in additional funding, including $50 million in equity and $50 million in debt financing.

The new capital was obtained as an extension to the company’s Series B, the first tranche of which closed in January. With the latest infusion, Medellin, Colombia-based La Haus has now secured $135 million total for the round and over $158 million in funding since its 2017 inception.

San Francisco Bay Area venture firms Acrew Capital and Renegade Partners co-led the round, which also included participation from Jeff Bezos’ Bezos Expeditions, Endeavor Catalyst, Moore Strategic Ventures, Marc Benioff’s TIME Ventures, Rappi’s Simon Borrero, Maluma, and Gabriel Gilinski. Existing backers who put money in this round include Greenspring Associates, Kaszek, NFX, Spencer Rascoff’s 75 & Sunny Ventures, Hadi Partovi and NuBank’s David Velez.

Jerónimo Uribe (CEO), Rodrigo Sánchez-Ríos (president), Tomás Uribe (chief growth officer) and Santiago Garcia (CTO) founded the company after Jerónimo and Tomas met Sánchez-Ríos at Stanford University. Prior to La Haus they started and ran Jaguar Capital, a Colombian real estate development company with over $350 million of completed retail and residential projects.

The company declined to reveal at what valuation the extension was raised, with Sánchez-Ríos saying only that it was “a significant increase” from January.

The Series B extension follows impressive growth for the startup, which saw the number of transactions conducted on its Mexico portal climb by nearly 10x in the second quarter of 2021 compared to the 2020 second quarter. With over 500 homes selling on its platform (via lahaus.com and lahaus.mx) the company is “the market leader in selling new housing in Spanish-speaking Latam by an order of magnitude,” its execs claim. La Haus expects to have facilitated more than $1 billion in annualized gross sales by the end of the year.

The startup was founded with the mission of making it easier for people to buy homes and helping “solve Latam’s extreme housing inequality.” Its end goal is to accelerate access to new housing by both generating and curating supply and demand and then matching it with its technology, noted Sánchez-Ríos.

“In the last six months, our chief product officer has built a product that allows this to happen 100% digitally,” he said. “Before it would take a lot of time, people involved and visits. We want to provide people looking for a home a similar experience as to people looking for their next flight at delta.com.”

It has done that by embedding its software to developers’ new projects so that it can bring that digital experience to its users.

“They are able to view the projects on our sites, we match them and then they can see in real time which units of a particular tower are available, and then select, sign and pay for everything digitally,” Sánchez-Río said.

The need for new housing in the region and other emerging markets in general is acute, they believe. And the pace of building new homes is slow because small and midsized developers — who are responsible for building the majority of new homes in Latin America — are cash constrained. At the same time, mortgages are mostly not affordable for consumers, with banks extending only a fraction of the credit to individuals compared to the U.S., and often at far worse terms.

What La Haus is planning to do with its new capital — particularly the debt portion — is go beyond selling homes via its marketplace to helping extend financing to both developers and potential buyers. It plans to take the proprietary data it has been able to glean from the thousands of real estate transactions conducted on its platform to extend capital to developers and consumers “more quickly, with much lower risk and at better terms.

”Already, what the startup has accomplished is notable. Being able to purchase a home 100% digitally is not that easy even in the U.S. Pulling that off in Latin America — which has historically trailed behind in digital adoption — is no easy feat. By year’s end, La Haus intends to be in every major metropolitan area in Mexico and Colombia.
Its ultimate goal is to be able to help new, sustainable homes “to be built faster, alleviating the inequality caused by lack of access to inventory.”

To Acrew Capital’s Lauren Kolodny, La Haus is building a solution specific to the issues of Latin America’s housing market, rather than importing business models — such as iBuying — from the U.S.

“For many people in the United States home equity is their largest asset. In Latin America, however, consumers have been challenged with an impenetrable real estate market stacked against consumers,” she wrote via email. “La Haus is removing barriers to home ownership that stifles millions of people from achieving financial security. Specifically, Latin America has no centralized MLS, very costly interest rates, no transactional transparency, and few online informational tools.”

La Haus, Kolodny added, is breaking down these barriers by consolidating listings online, offering pricing transparency and educating consumers about their financing options.

Acrew first invested in the startup in its $10 million Series A and has been impressed with its growth over time.
“They have a unique focus on new housing — a massive industry worldwide, but especially in emerging markets where new housing is so necessary,” Kolodny said. “The management team … knows real estate in Latin America better than anyone we’ve met.”

For its part, the La Haus team is excited to put its new capital to work. As Sánchez-Río put it, “$50 million goes a lot further in Mexico and Colombia than in the U.S.”

“We are going to be very aggressive in Mexico and Colombia, and plan to go from four to at least 12 markets by the end of the year,” Jeronimo told TechCrunch. “We’re also excited to roll out our financing solution to developers and buyers.”

Air taxis may still be pie in the sky, but there’s more than one way to move the air travel industry forward. Craft Aerospace, with $3.5M in funding, aims to do so with a totally new vertical takeoff and landing aircraft that it believes could make city-to-city hops simpler, faster, cheaper and greener.

The aircraft — which, to be clear, is still in small-scale prototype form — uses a new VTOL technique that redirects the flow of air from its engines using flaps rather than turning them (like the well-known, infamously unstable Osprey), making for a much more robust and controllable experience.

Co-founder James Dorris believes that this fast, stable VTOL craft is the key that unlocks a new kind of local air travel, eschewing major airports for minor ones or even heliports. Anyone that’s ever had to take a flight that lasts under an hour knows that three times longer is spent in security lines, gate walks and, of course, getting to and from these necessarily distant major airports.

“We’re not talking about flying wealthy people to the mall — there are major inefficiencies in major corridors,” Dorris told TechCrunch. “The key to shortening that delay is picking people up in cities and dropping them off in cities. So for these short hops, we need to combine the advantages of fixed-wing aircraft and VTOL.”

The technique they arrived at is what’s called a “blown wing” or “deflected slipstream.” It looks a bit like something you’d see on the cover of a vintage science fiction rag, but the unusual geometry and numerous rotors serve a purpose.

The basic principle of a blown wing has been explored before now but never done on a production aircraft. You simply place a set of (obviously extremely robust) flaps directly behind the thrust, where they can be tilted down and into the exhaust stream, directing the airflow downward. This causes the craft to rise upward and forward, and as it gets enough altitude it can retract the flaps, letting the engines operate normally and driving the craft forward to produce ordinary lift.

The many rotors are there for redundancy and so that the thrust can be minutely adjusted on each of the four “half-wings.” The shape, called a box wing, is also something that has been tried in a limited fashion (there are drones with it, for example) but ultimately never proved a valid alternative to a traditional swept wing. But Dorris and Craft believe it has powerful advantages, in this case, allowing for a much more stable, adjustable takeoff and landing than the two-engine Osprey. (Or, indeed, many proposed or prototype tilt-rotor aircraft out there.)

“Our tech is a combination of both existing and novel tech,” he said. “The box wing has been built and flown; the high flap aircraft has been built and flown. They’ve never been synthesized like this in a VTOL aircraft.”

To reiterate: The company has demonstrated a limited scale model that shows the principle is sound — they’re not claiming there’s a full-scale craft ready to go. That’s years down the line, but willing partners will help them move forward.

The fifth-generation prototype (perhaps the size of a coffee table) hovers using the blown wing principle, and the sixth, due to fly in a few months, will introduce the transitioning flaps. (I was shown a video of the prototype doing tethered indoor hovering, but the company is not releasing this test footage publicly.)

The design of the final craft is still in flux — it’s not known exactly how many rotors it will have, for instance — but the basic size, shape and capabilities are already penned in.

It’ll carry nine passengers and a pilot, and fly around 35,000 feet or so at approximately 300 knots, or 345 mph. That’s slower than a normal passenger jet, but whatever time you lose in the air ought to be more than regained by skipping the airport. The range of the cleaner hybrid gas-electric engines should be around 1,000 miles, which gives a good amount of flexibility and safety margins. It also covers 45 of the top 50 busiest routes in the world, things like Los Angeles to San Francisco, Seoul to Jeju Island, and Tokyo to Osaka.

Notably, however, Dorris wants to make it clear that the idea is not “LAX to SFO” but “Hollywood to North Beach.” VTOL aircraft aren’t just for show: Regulations permitting, they can touch down in a much smaller location, though exactly what kind of landing pad and micro-airport is envisioned is, like the aircraft itself, still being worked out.

The team, which just worked its way through Y Combinator’s summer 2021 cohort, is experienced in building sophisticated transport: Dorris was a primary on Virgin Hyperloop’s propulsion system, and his co-founder Axel Radermacher helped build Karma Automotive’s drivetrain. It may not have escaped you that neither of those companies makes aircraft, but Dorris thinks of that as a feature, not a bug.

“You’ve seen what’s come out of traditional aerospace over the last 10, 20 years,” he said, letting the obvious implication speak for itself that the likes of Boeing and Airbus aren’t exactly reinventing the wheel. And companies that partnered with automotive giants hit walls because there’s a mismatch between the scales — a few hundred aircraft is very different from half a million Chevy sedans.

So Craft is relying on partners who have looked to shake things up in aerospace. Among its advisers are Bryan Berthy (once director of engineering at Lockheed Martin), Nikhil Goel (one of Uber Elevate’s co-founders), and Brogan BamBrogan (early SpaceX employee and Hyperloop faithful).

The company also just announced a letter of intent from JSX, a small airline serving low-friction flights on local routes, to purchase 200 aircraft and the option for 400 more if wanted. Dorris believes that with their position and growth curve they could make a perfect early partner when the aircraft is ready, probably around 2025 with flights beginning in 2026.

It’s a risky, weird play with a huge potential payoff, and Craft thinks that their approach, as unusual as it seems today, is just plainly a better way to fly a few hundred miles. Positive noises from the industry, and from investors, seem to back that feeling up. The company has received early-stage investment totaling $3.5 million from Giant Ventures, Countdown Capital, Soma Capital and its adviser Nikhil Goel.

“We’ve demonstrated it, and we’re getting an enormous amount of traction from aerospace people who have seen hundreds of concepts,” said Dorris. “We’re a team of only seven, about to be nine, people. … Frankly, we’re extremely pleased with the level of interest we’re getting.”

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Pipo Saude, a startup that developed a platform that sells and manages healthcare benefits for Brazilian companies, has raised $20 million in a Series A round of funding.

Joshua Kushner’s Thrive Capital led the round, marking the first time the New York-based venture firm has led an investment in a Brazilian startup. (Although, notably, Thrive has also put money in Nubank and Loft.)

Atlantico participated in the financing as a new investor in addition to all existing backers including Monashees, Kaszek and OneVC. Nubank co-founder and CEO David Velez and Cedar co-founder and CEO Florian Otto (and former CEO of Groupon in Brazil) also joined in the round. Pipo Saude had raised $4.6 million in a seed round in June 2020 that was led by Monashees and Kaszek with the participation of OneVC and Nubank’s Velez.

Manoela Mitchell (CEO), Thiago Torres (COO) and Vinicius Correa (CTO) founded Pipo Saude in July 2019 with the goal of “bringing an unparalleled experience” of buying and managing healthcare benefits for corporations in combination with providing a care navigation platform for employees. More simply, its mission is to “transform” the healthcare experience for companies and their employees.

Pipo Saude started selling its solution six months after its inception. Over the past year, it has grown its ARR by “around 5x,” and the number of lives managed by 7.2x, according to Mitchell. Pipo currently has 100 corporate clients and 15,000 lives under management. Its clients include Brazilian unicorns MadeiraMadeira and Buser, Caelum and Funcional Health Tech, among others. Pipo Saude makes money off of commissions and says that its business model is a hybrid of Nava, Accolade and Rightway, but that Zenefits and Amino are inspirations or benchmarks that it “looks up to.”

When Pipo was first founded in 2019, the company was trying to convince prospective customers that digital healthcare could be an interesting option to reduce cost and improve care, according to Mitchell.

And then when the COVID-19 pandemic hit in March 2020, she added, the whole sector was forced to change and the company saw all stakeholders from doctors to employers to patients “adopting technologies to make their job easier or more accessible to others.”

This trend also helped Pipo grow. In January 2020, it had two corporate clients. By December of the same year, it had around 70.

“COVID has fast-forwarded the digital transformation of the healthcare system everywhere, but even more so in a place like Brazil that was a few years behind the U.S. when it came to technology penetration in the health space,” Mitchell said.

Because healthcare is so complex, most companies outsource the benefits capabilities to traditional brokers. Pipo, she said, was created to “disrupt this landscape” with the use of technology and data.

The company claims that enrolling a new member in a healthcare plan can typically take up to 10 business days in Brazil, but that Pipo “can do it in less than 1 hour” given its integrations with HMO/PPOs. It plans to use the new funds to continue investing heavily in technology and data with the goal of launching its first digital product that will be “100% focused” on its members.

Sao Paulo-based Pipo currently has 108 employees distributed across 33 cities and three countries, up from 27 a year ago. During the pandemic, it evolved into being a “remote-first-company.”

The startup also plans to use its new capital to do some hiring, with the goal of doubling the number of its full-time employees by year’s end. Mitchell described the business model as an “asset-light” one that connects healthcare buyers, users and products without having any type of regulatory capital need.

In the medium to long term, Mitchell said the team views Pipo as a local business rather than a global one.

“Going deep into healthcare data and protocols requires a lot of specialization and deep understanding,” she said. Also, the opportunity in Brazil is just so large.

“We are focused on being the local leader in Brazil rather than having a broader but shallower expertise across many markets,” Mitchell said.

Kareem Zaki, a general partner at Thrive, said his firm invested in Pipo Saude because it viewed the company as the first of its kind innovating the channel by which healthcare solutions reach individuals and their families.

“Pipo is using data to deliver value at every step of the customer journey, from informing employers’ purchase decisions and automating manual pieces of benefit management to helping employees navigate the healthcare system to meet their individual needs,” he wrote in an email. “The result is 20% better savings, up to 50 times faster workflows, and a 97% customer satisfaction rate that is unprecedented in the industry.”

Pipo Saude is not the only Brazilian startup tackling the benefits space. Earlier this month, Flash, a startup that has developed a flexible benefits platform for Brazilian companies and employees, announced it had raised $22 million in a Series B round of funding led by Tiger Global Management.

In Bangladesh, students often rely on after school learning centers for study help or test preparation, but many of the best ones are concentrated in major cities. Edtech startup Shikho was created to make supplementary education more accessible and affordable. The company announced today it has closed a $1.3 million seed round co-led by returning investor LearnStart (the seed fund of edtech investment firm Learn Capital) and Anchorless Bangladesh. 

The round also included participation from Wavemaker Partners and Ankur Nagpal, founder and chief executive officer of online course platform Teachable. Shikho’s last round of funding was $275,000 in pre-seed financing last year from LearnStart and strategic angel investors. 

Founded in April 2019, Shikho is focused on grades 9, 10, 11 and 12, with plans to introduce content for grades 6 up to university level and continuous education. Its learning material, created by educators and subject experts, is based on the Bangladeshi National Curriculum. To keep students engaged, it uses gamification techniques, like points, leaderboards and virtual awards. 

Shikho was founded in April 2019 by CEO Shahir Chowdhury, who previously worked in finance and business, including as a director at HSBC UK’s Private Bank, and chief operating officer Zeeshan Zakaria, who also worked in finance before becoming a mathematics teacher. 

Both grew up in Dhaka before moving to the United Kingdom, where they went to university. Chowdhury told TechCrunch that even while working in finance, his goal was to launch a socially impactful business in Bangladesh. 

At first, Chowdhury looked at fintech because of his career experience, but realized there were already many players focused on financial inclusion in Bangladesh, like bKash. He started thinking about education–Chowdhury’s father is a retired professor and his mother still teaches high school. Then by coincidence, he worked on a client report about the emergence of Indian and Chinese edtech startups, like Byju’s and Toppr. 

“I tried to understand what edtech was and why it was working in those markets and why it didn’t exist in Bangladesh,” said Chowdhury. “When I looked at that closely, there was no reason for it not to exist in Bangladesh. From an macroeconomic perspective, you have all the elements you need. You have a very large population, about 165 million people, and half of that is under the age of 25.”

Chowdhury reached out to Zakaria to lead Shikho’s academic programming. Shikho’s goal is to find more engaging and effective ways to teach students material from the Bangladesh National Curriculum. 

“Not much has changed since my dad was in grade 10 in terms of the syllabus,” said Zakaria. “I’m not a politician, so I can’t bring about change there, but I can change how it’s delivered. We deliver the curriculum in a way that has never been seen before in terms of the pedagogical experience.” 

Shikho launched about a year before the COVID-19 pandemic began, but that didn’t change its approach to product development because it was always meant to be an online learning platform. 

The company works with educators to create content, including animated videos that break down topics into short segments of about six minutes each to help students learn at their own pace. Each video is supplemented with digital resources called smart notes to replace the guidebooks many students buy for studying, and practice questions with detailed solutions.

Shikho’s main video content is pre-recorded, but it will also launch live classes for its app and web portal in about six weeks. The company’s new funding will allow it to scale-up content production, including an app for parents. 

One of the biggest challenges for online learning platforms is keeping students motivated. Chowdhury said Shikho’s gamification system was inspired by the Nike Run Club app. Similar to how Nike Run Club users get points every time they go on a run, Shikho gives students points when they log in, do a test or watch a video. The points can be collected for milestones ranging from beginner to “legend,” and special badges are awarded for accomplishments like finishing a test quickly and accurately. 

The point system also feeds into a leaderboard, so students can see how many points they have compared to other Shikho users at their school, or on the entire app. 

The app is free to use for seven days. One of the company’s plans for its new funding is to launch more freemium content to increase user conversions into paying customers. Chowdhury says that paying users have high engagement rates, typically spending about 45 to 50 minutes daily in the app. Shikho plans to double-down on its user acquisition strategy, including offline sales teams in front of schools, at the end of the year after launching its app for parents. 

“Students are the users and the actual customers are their parents, so we’re conscious that we’re going to have to flip communication to the parents,” said Chowdhury. “That’s part of what this funding round is for.” 

In statement about investment, Anchorless Bangladesh founding partner and CEO Rahat Ahmed said, “Bangladesh has one of the largest allocations of private education expenditure as a percentage of disposable income in the world, but lags behind countries like India and Indonesia when it comes to edtech funding. The market is primed for growth and we believe the team at Shikho is well-fit to lead the charge and take education to the next level.” 

For fleet managers, managing shipping crew changes across different countries is an elaborate process even in the best of times—and now is definitely not the best of times. Greywing, a Y Combinator-backed platform for automating maritime operations, launched a new solution today that it describes as an industry-first. Called Crew Change, it is used to help shipping companies manage testing, quarantine and other COVID-19 regulations for their crew members.

Crew Change draws on data from S5 Agency World, a global port agency, to keep on top of quarantine, testing and vaccination requirements, which are constantly changing. Greywing co-founder and chief executive officer Nick Clarke says Crew Change can potentially save fleet managers millions of dollars by streamlining crew changes, finding the most cost-effective flights for transporting crew, planning routes (or rerouting if necessary) and reducing delays, which have a trickle-down effect on the rest of the supply chain.

Greywing’s other solutions help fleet operators manage important tasks, like assessing sea routes for piracy risks and transporting crew to ships. Clarke told TechCrunch in an email that the company was originally created to help the maritime industry to mitigate risks in the Gulf of Guinea and offshore Somalia, which have high rates of piracy, by delivering rapid intelligence about those shipping lanes.

“We discovered that by going beyond this, we could deliver intelligence on where their crew could disembark to solve what was top of mind for seafarers—getting home to their families,” he said.

When the COVID-19 pandemic started, Greywing started getting requests from clients who urgently needed help to manage crew changes. “They had personnel trapped on vessels unable to get on and off all over the world. My co-founder Hrishi [Olickel] and I examined the problem and seeing the growing complexity of global lockdowns, realized it was a problem that was here to stay.”

Crew managers have to stay on top of changing immigration restrictions in hundreds of countries and thousands of ports around the world, Clarke added. To complicate things further, many crews include members of different nationalities, who are often subject to different restrictions.

Much of the crew change process is analog. For example, a manager of a vessel chartered to a third-party may only find out its next destination by emailing the ship’s captain. Crew changes are often planned through spreadsheets, and flight bookings are done through email or phone.

“Even before the pandemic, crew change management was a classic problem that has always been hard to navigate, but with a few more levels of consideration added to that data at random, it became totally impractical for even a team of humans to make sense of,” said Clarke.

Greywing was able to create Crew Change by making small changes to its piracy risk mitigation methodology, and it is now integrated into CRY4, Greywing’s risk reporting solution.

The company worked with S5 Agency World because it “is regarded as one of the leading global port agencies which services port offices worldwide,” Clarke said. “What that means is their data is able to give us a clear picture of what’s happening on the ground so shipping owners can better predict and manage what’s happening on the seas.” Crew Change also uses data from 30 other public and private data APIs and is planning to add another 20 data sources.

Thanks to its wide range of data sources, Clarke said that Crew Change is able to update information about visa, quarantine and testing requirements in as little as 15 minutes (or a day for more complex data).

According to one estimate, Americans call 911 about 240 million times every year.

Sending emergency services to the right location sounds straightforward, but each 911 call is routed through one of thousands of call centers known as public safety answering points (PSAPs).

“Every 911 center is very different and they are as diverse and unique as the communities that they serve,” said Karin Marquez, senior director of public safety at RapidSOS.

One PSAP that serves New York City is a 450,000-square-foot, blast-resistant cube set on nine acres, but you also have “agencies in rural America that have one person working 24/7 and they’re there to answer three calls a day,” Marquez noted.

Founded eight years ago, RapidSOS processes more than 150 million emergencies each year across approximately 5,000 PSAPs. The company’s technology helps call centers integrate requests from cell phones, landlines and IoT devices.

“Its technology is almost certainly integrated into the smartphone you’re carrying and many of the devices you have lying around,” Managing Editor Danny Crichton writes in a four-part series that studies the company’s origins and ensuing success:

Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription

“I’ve honestly never met a company like RapidSOS with so many signed partnerships,” says Danny, who initially wrote about the firm six years ago.

“It’s closed dozens of partnerships and business development deals, and with some of the biggest names in tech. How does it do it? This story is about how it built a successful BD engine.”

Thanks very much for reading Extra Crunch this week!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

How to prepare for M&A, your most likely exit avenue

The headlines might be littered with mega deals, IPOs and SPACs, but in all likelihood, you will exit your startup via a relatively smaller merger or acquisition, Ben Boissevain writes in a guest column.

“The IPO market is healthy again, but M&A still represents 88% of exits: So far this year, there were 503 IPOs and 5,203 deals,” writes Boissevain, founder of Ascento Capital.

“While it is good to strive for a billion-dollar-plus sale, a successful IPO or a SPAC deal, it is practical to prepare your startup for a smaller transaction.”

Duolingo boosts IPO price target in boon to edtech startups

U.S. edtech company Duolingo bumped up its IPO price range Monday morning, targeting $95 to $100 per share, up from previous guidance of $85 to $95 per share.

“The fact that Duolingo is raising its IPO price range indicates that we are more likely on the path for a strong offering than a weak one,” Alex Wilhelm notes.

Data-driven iteration helped China’s Genki Forest become a $6B beverage giant in 5 years

Many Extra Crunch readers will not have heard of China’s fastest-growing bottled beverage company: Genki Forest is a direct-to-consumer startup that started selling its sodas, milk teas and other products just five years ago.

Today, its products are available in 40 countries and the company hopes to generate revenue of $1.2 billion in 2021. After closing its latest funding round, Genki Forest is valued at $6 billion.

Industry watchers frequently compare the upstart to giants like PepsiCo and Coca-Cola, but founder Binsen Tang comes from a tech background, having funded ELEX Technology, a social gaming company that found success internationally.

“China doesn’t need any more good platforms,” Tang told his team in 2015, “but it does need good products.”

Leveraging China’s robust distribution network, lighting-fast manufacturing capabilities and a vast pool of data that enables holistic digitization, Genki Forest sells more than 30% of its products online.

“Everything feels right about the company,” said VC investor Anna Fang. “The space, the founder, the products and the back end … they exemplify the new Chinese consumer brand.“

Sequoia’s Mike Vernal outlines how to design feedback loops in the search for product-market fit

Sequoia’s Mike Vernal joined us on TechCrunch Early Stage: Marketing and Fundraising to discuss how founders should approach product-market fit, with a specific focus on tempo.

It doesn’t mean fast in the kind of uncontrolled, reckless, crashing sense. It means fast in a sort of consistent, maniacal, get-a-little-bit-better-each-day kind of way. And it’s actually one of the top things that we look for, at least when evaluating a team: How consistently fast they move.

As China shakes up regulations, tech companies suffer

Alex Wilhelm spent the end of last week and the beginning of this one looking at Chinese regulations targeting its edtech sector, aiming to understand “precisely what is going on with the various regulatory changes.”

“For startups, the regulatory changes aren’t a death blow; indeed, many Chinese tech startups won’t be affected by what we’ve seen thus far,” he writes. “But on the whole, it feels like the risk profile of doing business in China has risen.”

Automakers have battery anxiety, so they’re taking control of the supply

To ensure a steady supply of batteries, automakers are increasingly looking to joint ventures.

“Like if you’re VW, and you say, ‘We’re going to go 50% electric by whatever year,’ but then the batteries don’t show up, you’re bankrupt, you’re dead,” Sila Nano CEO Gene Berdichevsky said in a recent interview.

“Their scale is so big that even if their cell partners have promised them to deliver, automakers are scared that they won’t.”

Pro tips from the team behind Kickstarter’s most funded app

The team at memoryOS “spent countless hours researching down the rabbit hole of crowdfunding tips and tricks” before it successfully became the most-funded app on Kickstarter, the company’s CEO, Alex Ruzh, writes in a guest column.

“We’re sharing our approach (and secrets) to building a successful crowdfunding campaign because we know just how tough it can be to launch your own product,” he writes.

SOSV partners explain how deep tech startups can fundraise successfully

Startups developing so-called deep tech often find it challenging to raise capital for various reasons.

At TechCrunch Early Stage: Marketing and Fundraising, two experienced investors, SOSV partners Pae Wu and Garrett Winther, spoke on the subject and advised startups facing a challenging fundraising path.

Checkout is the key to frictionless B2B e-commerce

Processing payments, credit and authorizations for B2B purchases is all handled electronically, but that’s not a panacea.

For example, volume sellers prefer to work through traditional accounts payable systems instead of paying the service fees smaller companies accept as the cost of doing business.

However, the combination of fraud and identity protection with credit handling and digital payments “creates a powerful network, the type that can not only build trust but enable one-click transactions at scale,” says Andrew Steele, an investor at Activant Capital.

Cowboy Ventures’ Ted Wang: CEO coaching is ‘about having a second set of eyes’

At TechCrunch Early Stage: Marketing and Fundraising, Cowboy Ventures’ Ted Wang spoke about why he encourages founders in his portfolio to work with executive coaches.

I don’t think you need to limit advice from people who are “been there, done that.” I think it is really important to get input from those people, but in terms of personal development, I think you want insight from people who understand how human beings listen and learn and grow.

Twitter’s recent acquisition spree continues today as the company announces it has acqui-hired the team from news aggregator and summary app Brief. The startup from former Google engineers launched last year to offer a subscription-based news summary app that aimed to tackle many of the problems with today’s news cycle, including information overload, burnout, media bias and algorithms that promoted engagement over news accuracy.

Twitter declined to share deal terms.

Before starting Brief, co-founder and CEO Nick Hobbs was a Google product manager who had worked on AR, Google Assistant, Google’s mobile app, and self-driving cars, among other things. Co-founder and CTO Andrea Huey, meanwhile, was a Google senior software engineer, who worked on the Google iOS app and had a prior stint at Microsoft.

While Brief’s ambitious project to fix news consumption showed a lot of promise, its growth may have been hampered by the subscription model it had adopted. The app required a $4.99 per month commitment, despite not having the brand-name draw of a more traditional news outlet. For comparison, The New York Times’ basic digital subscription is currently just $4 per week for the first year of service, thanks to a promotion.

Twitter says the startup’s team, which also includes two other Brief employees, will join Twitter’s Experience.org group where they’ll work on areas that support the public conversation on Twitter, including Twitter Spaces and Explore.

While Twitter wouldn’t get into specifics as to what those tasks may involve, the company did tell TechCrunch it hopes to leverage the founders’ expertise with Brief to build out and accelerate projects in both those areas.

Explore, of course, is Twitter’s “news” section, where top stories across categories are aggregated alongside trending topics. But what it currently lacks is a comprehensive approach to distilling the news down to the basic facts and presenting balance, as Brief’s app had offered. Instead, Twitter’s news items include a headline and a short description of the story, followed by notable tweets. There’s certainly room for improvement there.

It’s also possible to imagine some sort of news-focused product built into Twitter’s own subscription service, Twitter Blue — but that’s just speculation at this point.

Twitter says it proactively reached out to Brief with its offer. As part of its current M&A strategy, the company is on the hunt for acquiring talent that will complement its existing teams and help to accelerate its product developments.

Over the past year, Twitter has made similar acqui-hires, including those for distraction-free reading service Scroll, social podcasting app Breaker, social screen-sharing app Squad, and API integration platform Reshuffle. It also bought products, like newsletter platform Revue, which it directly integrated. The company even held acquisition talks with Clubhouse and India’s ShareChat, which would have been much larger M&A deals.

“We’re really glad we ended up at Twitter,” Hobbs told TechCrunch.

“Andrea and I founded Brief to build news that fostered a healthy discourse, and Twitter’s genuine commitment to improve the public conversation is deeply inspiring,” he said. “While we can’t discuss specifics on future plans, we’re confident our experience at Brief will help accelerate the many exciting things happening at Twitter today,” he added.

Hobbs said the team remains optimistic about the future of paid journalism, too, as Brief demonstrated that some customers would pay for a new and improved news experience.

“Brief pioneered a fresh vision for journalism, focused on getting you just the news you need rather than as much as you could withstand,” remarked Ilya Kirnos, founding partner and CTO at SignalFire, who backed Brief at the seed stage. “That respect for its readers made SignalFire proud to support founders Nick Hobbs and Andrea Huey, who are now bringing that philosophy to the top source of breaking news — Twitter.”

To date, Brief had raised a million in seed funding from SignalFire and handful of angel investors, including Sequoia Scouts like David Lieb, Maia Bittner and Matt Macinnis.

As a result of today’s deal, Brief will wind down its subscription app on July 31. The company says it will alert its current user base today via a notification about its forthcoming shutdown but the app will remain on the App Store offering new features that allow users to explore its archives.

When Anada Lakra and Ilya Usorov first moved to the United States, they struggled to find their voices. They both knew and understood English, but when it came time to speak up, their accents became a hurdle. Usorov, for example, watched his Russian-born parents struggle to advocate for themselves, which limited work opportunities. While Lakra, who just started college at Yale University, was constantly asked to repeat herself.

“Will I be able to express myself clearly enough? Will I be understood? Will I be as impactful?” Lakra remembers questioning herself. “My accent pronunciation made me feel like I really wasn’t my full self — and I lost a little of my personality.”

It’s an issue experienced, to varying degrees, by many of the roughly 65 million nonnative English speakers in the United States. Viewing accent as a hurdle in jobs, confidence and relationship-building, the duo teamed up as co-founders to build a solution.

Now, Lakra and Usorov are launching BoldVoice, an accent coaching app that helps users refine their pronunciation of the English language. The New York-based startup, currently going through Y Combinator’s summer 2021 batch, raised a pre-seed round of about $605,000 from the accelerator and XFund.

Hollywood, meet edtech

BoldVoice has a very specific user in mind: nonnative English speakers who learned the language on paper but now need help speaking and interacting with people.

The startup uses short-form videos, taught by Hollywood accent coaches who traditionally help actors, to deliver content. The curriculum is built around three Ps: posture, to help with the physical feel of using an English R versus a Spanish R; phonology, the vowels and consonants; and porosity, which is the musicality of an accent. So far, there are two Hollywood accent and dialect coaches on the platform: Ron Carlos and Eliza Simpson.

“We’re really thinking about this in the same way that an actor will learn an accent for a new role,” where they have to pick it up very quickly, Lakra said. “We want to bring the same discipline and process to everyone at home, so we have Hollywood accent coaches who are trained voice speech and dialect coaches” as well as advisers who have degrees in linguistics.

Beyond its short-form videos, the company plans to integrate artificial intelligence into its product. When a user practices a speech, BoldVoice records the speech sample, feeds it into an algorithm and, over time, will be able to recommend more tailored exercises to their weak areas. It is using open-source software currently but is developing its own AI algorithm for the future. Real-time feedback would be a feat.

The sign-in process is pretty simple. Users are asked to set goals around accent confidence, explain English proficiency and identify native language, as well as the situation in which they want to improve, which can range from in the workplace to social settings. Users are also asked to commit pronunciation practice for 10 minutes a day, with the option to say no.

They are then given a lesson plan, which is only accessible through a subscription. The company charges $10 a month or $70 a year, which is meant to be more accessible than private accent coach tutoring, which can hit $200 per hour. There is currently no free experience for BoldVoice beyond a one-week free trial.

After launching a little over a month ago, BoldVoice has attracted 1,000 users, most of whom come from India, China, or are Spanish speakers. The company is focusing on creating “hyper-personalized” content around these core users, and will have its work cut out for it: There are 121 languages spoken by more than 10,000 people in India, with the Indian constitution officially recognizing 22 languages.

The owl is watching

BoldVoice is looking to dig into the crowded market of language learning startups at a key time for the edtech subsector. Language learning unicorn Duolingo is set to go public this week, which could cast a golden halo on other consumer edtech businesses. The company has already raised its expected price range ahead of its public offering, a confident move. Other companies such as Busuu and Babbel have also made progress in carving out spheres of language learning.

But Lakra doesn’t think any existing language learning apps have won over the accent market yet. She explained how learning a language is about memorization of vocabulary and grammar, while learning an accent is about working out your mouth through tongue exercises. The latter, which BoldVoice focuses on, doesn’t yet seem to be a priority for other businesses.

She’s not wrong. Duolingo excels at reading and writing literacy, but it has not yet shared any known efficacy studies about its pronunciation efforts. The company tried launching a chatbot in its early days to help users practice conversations. The highly requested feature flopped, though, as 80% of users didn’t use it — a reaction that CEO Luis von Ahn thinks underscores how difficult it is to get consumers to practice speaking.

Duolingo is now building investment in a team around speech recognition technology, as well as eyeing M&A opportunities. BoldVoice, which similarly uses bite-sized content and streaks, could bring its product of confidence to Duolingo’s mission of motivation.

Beyond the complementary yet competitive landscape, BoldVoice’s challenge ahead may just be that it is playing in a sensitive area. Someone’s voice is an integral part of their identity. BoldVoice will need to balance helping people, while also not erasing what makes them them.

Lakra thinks that they can strike the balance. Her perception of the user is constantly evolving.

“Users are already telling us that it would be awesome to get more tips around public speaking or how to interject in a meeting or how to give feedback politely,” she said. The requests are all about how to culturally and linguistically use English in a professional English-speaking environment, and BoldVoice is working with coaches to create content beyond pronunciation and into cadence, projection and intonation.

“We definitely want to move and make this a tool that helps people not just say the word the right way, but just feel confident in everything they say.”

From day one, Pillar VC has offered to buy common stock in startups.

Instead of the standard 10-page venture capital term sheet riddled with terms and conditions, our team believed that a far simpler structure where we owned the same security as the founders would align interests, increase trust, and hopefully, enhance the performance of our investments.

Five years since launching Pillar, as we finish investing our second fund and begin deploying our third, we thought it was a good time to reflect on whether buying common stock instead of preferred stock has offered the benefits that we had hoped for.

Preferred stock can misalign incentives between parties

There are many terms and conditions in a preferred term sheet that can misalign investors and founders — for brevity, I’ll highlight just two below. (For more, see the term-sheet grader).

Preference: Preferred stock has a “preference” that gives the investor the right to choose whether they want to get their money back or take their percentage of the total proceeds. In downside scenarios, having an investor take their money back may mean that they are taking a far higher percentage of the proceeds than the founders “thought” they sold.

For example, if an investor buys 25% of a company for $2 million in preferred stock, their break point on this decision will be $8 million, which happens to be the post-money valuation of the round. If the company is sold for less than $8 million, the investor would rather take their $2 million back. If the company is sold for more than that, the investor would choose to take 25% of the total.

The founder thinks that they sold 25% of their company, but that percentage is actually determined by what the company is sold for. Yes, if the company is sold for $8 million or more, they sold 25%, but if the company is sold for, say $4 million, the investors will choose to take their $2 million back, which is 50% of the proceeds. Worse still, if the company is sold for just $2 million, investors will take all of it.

Anti-dilution: This clause means that if an investor buys shares for $10 and the startup raises money in the future at a price point that is lower than $10, the investor’s share price will be recalculated retroactively to a lower price. How is this done? By issuing the investors more shares, which dilutes the rest of the ownership pie, especially the founders and employees. The company is not performing well and the investors are made whole at the expense of the founders. Aligned? Hardly.